The limits of green concertation: business fragmentation and the political economy of the agricultural transition in the Netherlands

Greening production models is likely to generate costs and, in turn, resistance from organised interests. Concertation institutions enable governments to diffuse this opposition by involving and compensating losers through bargains, incrementally leading to more stringent environmental policies. However, we argue that governments’ capacity to pass on such reforms via concertation partly depends on the degree of horizontal business fragmentation, namely intra-business conflicts on the definition of the sector’s key interests. High costs and the perceived lack of transition opportunities are likely to increase fragmentation. We observe these phenomena in the Dutch agricultural sector during the so-called ‘nitrogen crisis’ (2019-2023). Using systematic process analysis, we show how fragmentation within agricultural business interests enabled fringe actors to steer the dominant farmers’ association towards opposition, highlighting the costs of the reform and weakening the government’s capacity to implement necessary policies. The article refines current institutional theories in environmental policy and underlines the weaknesses of consensual democracy in addressing environmental challenges.